European Union at 50 wonders where it should go from here

BRUSSELS, Belgium - In the 1960s, when the rest of Europe was relishing a pop song featuring heavy-breathing lovemaking, Portugal's fascist dictatorship banned it, forcing a Portuguese law student named Jose Manuel Barroso to share the recording clandestinely with his friends.

"I could not buy the books I wanted, or listen to the music I liked," says Barroso. "My generation saw Europe as ... a destination for those who wanted freedom and democracy."

Today, Portugal is among several former dictatorships, right-wing and communist, that have reached that destination by becoming democracies, embracing free markets and joining the European Union. In fact, as the 27-nation bloc celebrates its 50th anniversary this weekend, Barroso is its most senior executive.

Yet this union, founded to unite a war-wracked continent, is full of angst - about globalization, welfare, immigrants, a demographic crisis of dwindling birth rates and the challenge of U.S., Chinese and Indian economic might.

The EU is in many ways a momentous accomplishment: A single currency, borderless expressways, the world's only fully elected multinational parliament, a social safety net delivering everything from hefty pensions to heart transplants, vacations as long as seven weeks a year, work weeks as short as 35 hours.

Its greatest achievement, perhaps, is its qualifications for membership. Nations wishing to join must adopt an array of one-size-fits-all laws that is spreading democracy and human rights to 490 million people from the Atlantic to the borders of Russia.

The question is, where does it go from here?

For the EU's founding generation, which lived through the trench slaughter of World War I and the genocidal Nazi dictatorship of World War II, the overriding goal was to lock Europe's quarrelsome nations into an embrace that would make war impossible. But that success is so spectacular that it's no longer much of a selling point.

As president of the EU's policymaking commission, Barroso acknowledges the problem.

"Sixty years of peace means the image of Europe as a bastion against war is losing its resonance," he said in an interview.

The next giant leap was to have been a mechanism to streamline decision-making, give the union a president and foreign minister, and write a constitution that would have made it something like a United States of Europe.

But there are many who fear their national priorities will be submerged in a European superstate, and the constitution idea went on hold in 2005 after the French and Dutch voted it down in referendums.

At their Saturday-Sunday summit in Berlin to mark the 50th anniversary of the signing of the Treaty of Rome that launched Europe's common market, EU leaders are to issue a declaration they hope will infuse new life into the European project.

Yet many believe the debacle of the constitution is merely a symptom of a deeper resistance to changing the comfortable setup Europeans have grown used to.

To make themselves more competitive economically, several European governments have tried to reform Europe's cushy labor and social welfare systems - only to back down in the face of fierce protests.

"The European Union is going through a crisis," said Luxembourg Prime Minister Jean-Claude Juncker, adding that the French and Dutch â€˜no' votes "did not cause this crisis, but simply made it more visible."

Another area where the EU seems to have reached its limits - at least for now - is in taking in more poor countries that will cost the wealthier member states billions of dollars in subsidies to bring their economies up to Western standards. Having just admitted in Bulgaria and Romania, Europeans show little appetite for bringing in Turkey, Ukraine or Albania. Still, Barroso is guardedly optimistic about the EU's prospects in the 21st century, provided EU nations unite on challenges ranging "from energy security to climate change to international terrorism." "Globalization is happening. Can we shape it to our interests and values? We believe we can," he said. Some Europeans would like their continent to be a superpower that would counterbalance the United States and use the "soft power" of its values and economic clout to make a better world. British Conservative George Osborne is one of the so-called Euro-skeptics who don't think Europe should strive to be a political world power. "It hasn't understood that today the primary challenge we face is an economic one, not a political one. For my generation the question for Europe is not how to unite, but how to compete - not only within Europe, but with the rest of the world," he said. One of the EU's biggest challenges is its demographic crisis. By 2010, there will be more Europeans in their 60s than in their 20s. The EU's working population will drop by 48 million by 2050, according to EU data. Unless the average birth of 1.5 children per female rises to 1.7, warns EU Employment Commissioner Vladimir Spidla, "Europe will find it increasingly difficult to remain competitive and - equally alarming - to finance pensions."